Correlation Between Telesis Bio and Sight Sciences

Can any of the company-specific risk be diversified away by investing in both Telesis Bio and Sight Sciences at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Telesis Bio and Sight Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Telesis Bio and Sight Sciences, you can compare the effects of market volatilities on Telesis Bio and Sight Sciences and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Telesis Bio with a short position of Sight Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telesis Bio and Sight Sciences.

Diversification Opportunities for Telesis Bio and Sight Sciences

0.6

Correlation Coefficient

Telesis Bio  Sight Sciences

Poor diversification

The 3 months correlation between Telesis and Sight is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Telesis Bio and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences and Telesis Bio is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Telesis Bio are associated (or correlated) with Sight Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sight Sciences has no effect on the direction of Telesis Bio i.e., Telesis Bio and Sight Sciences go up and down completely randomly.

Pair Corralation between Telesis Bio and Sight Sciences

Given the investment horizon of 90 days Telesis Bio is expected to generate 8.1 times more return on investment than Sight Sciences. However, Telesis Bio is 8.1 times more volatile than Sight Sciences. It trades about 0.11 of its potential returns per unit of risk. Sight Sciences is currently generating about -0.16 per unit of risk. If you would invest  342.00  in Telesis Bio on September 3, 2024 and sell it today you would lose (44.00) from holding Telesis Bio or give up 12.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	37.5%
Values	Daily Returns

Telesis Bio  vs.  Sight Sciences

Telesis Bio

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Telesis Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak forward indicators, Telesis Bio displayed solid returns over the last few months and may actually be approaching a breakup point.

Sight Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sight Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Telesis Bio and Sight Sciences

The main advantage of trading using opposite Telesis Bio and Sight Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telesis Bio position performs unexpectedly, Sight Sciences can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sight Sciences will offset losses from the drop in Sight Sciences' long position.

The idea behind Telesis Bio and Sight Sciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.